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Fact checking Rick Perry’s announcement speech

at 06:00 AM ET, 08/15/2011


(BRIAN SNYDER/REUTERS)

Well, goodbye Tim Pawlenty, hello Rick Perry.

The Texas governor announced that he is running for president on Saturday, just hours before the Ames Straw Poll in Iowa that ended Pawlenty’s presidential aspirations. As has been our custom, we will take a look at some of the assertions made in Perry’s announcement speech and then render a blended Pinocchio rating.

“Since June of 2009, Texas is responsible for more than 40 percent of all of the new jobs created in America. Now think about that. We’re home to less than 10 percent of the population in America, but 40 percent of all the new jobs were created in that state.”

This is a great-sounding statistic, and likely will form the core of Perry’s campaign against a presidency that thus far has negative job creation.

But, as always, there needs to be some context. The Federal Reserve Bank of Dallas has especially promoted this figure, and even it acknowledges that the number comes out differently depending on whether one compares Texas to all states or just to states that are adding jobs. Since Texas is adding jobs, and many other states are losing jobs, Texas’s gains become out-sized in a general national survey.

Texas, as a state rich in oil and national gas, has also benefited from increases in energy prices that have slowed the economy elsewhere in the country. Higher energy prices have meant more jobs in Texas. Though Perry proudly claims the job growth is the result of a low-tax, anti-regulatory environment, others have pointed to a big investment in education in the 1980s that, yes, was the result of a tax increase.

“We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax.”

This is an interesting attack line from the governor of one of the nine states with no state income tax. It is also odd because he seems to be suggesting that he would raise taxes, or at least make lower-income people pay a higher share of taxes.

Perry is referring to federal income taxes, but slightly understates the situation. The most recent estimate, by the nonpartisan Joint Committee for Taxation, is that 51 percent of taxpayer units (such as individuals or couples) in 2009 had no income tax liability. However, the most precise way to interpret the data is that 22 percent had no actual income liability, while 30 percent received refundable credits that wiped out what they owed in income taxes.

This analysis, while interesting, lacks context because it does not include payroll taxes (such as Social Security and Medicare.) In fact, the Social Security tax ends once someone earns more than $106,800, so as a percentage of income, that tax falls mostly on the poor and middle-class. (Payroll taxes in general are regressive, while the income tax code is progressive.)

In fact, 75 percent of tax filers pay more in payroll taxes than they do in income taxes. So when income taxes and payroll taxes are combined, the tax burden on the wealthy seems much more fair.

Another way to look at overall taxation is the percentage of federal taxes compared to the overall economy (Gross Domestic Product.). This year federal taxes are estimated to be 14.4 percent of GDP, the lowest level since 1950. (See table 2.3)

“That’s why we reject this President’s unbridled fixation on taking more money out of the wallets and pocketbooks of American families and employers and giving it to a central government. ‘Spreading the wealth’ punishes success while setting America on course to greater dependency on government.”

“Spreading the wealth” refers to a comment Obama made — to “Joe the Plumber” — while campaigning for the presidency in 2008. For what it’s worth, Obama appeared to referring to progressive taxation, meaning people who earn more money pay higher rates of taxes. (His plan would boost rates on higher-income Americans.) This has been a central element of the U.S. tax system since the introduction of the income tax, and the charge at the time by the McCain campaign that Obama was a closet Socialist fell flat.

Perry also speaks rather broadly about his claim that Obama’s “unbridled fixation” to take money “out of the wallets and pocketbooks of American families” since Obama’s proposals have been aimed at the top echelon of American taxpayers — those making more than $250,000 a year. With the exception of such taxes in the new health care law, Obama has been notably unsuccessful in raising these taxes because of GOP opposition in Congress.

“To paraphrase Abraham Lincoln and Ronald Reagan, I realized that the United States of America really is the last great hope of mankind.”

Props to Perry for giving credit where credit is due. Lincoln, in his 1862 State of the Union address to Congress, said, “we shall nobly save, or meanly lose, the last best hope of earth.” He, of course, was speaking of the Union (against which, incidentally, Texas was fighting a war on behalf of the Confederacy.) Reagan used a variation of this line in many speeches, such as in 1964, when he declared, “We will preserve for our children this, the last best hope of man on earth, or we will sentence them to take the first step into a thousand years of darkness.”

What’s interesting is that Perry changed “last best hope” to “last great hope.” We’re not sure of the significance of this shift, unless he is trying to eventually claim the phrase as his own.

“His policies are not only a threat to this economy, so are his appointees – a threat. You see he stacked the National Labor Relations Board with anti-business cronies who want to dictate to a private company, Boeing, where they can build a plant. No president, no president should kill jobs in South Carolina, or any other state for that matter, simply because they choose to go to a right-to-work state.”

Perry is correct that shortly after Obama’s appointees became a majority of the NLRB, the independent agency brought a lawsuit against Boeing for building a plant in South Carolina, a right-to-work state, alleging that it was designed to punish the Machinist union in Seattle and discourage future strikes.

The case has become a political headache for Obama, who in June said, “What I think defies common sense would be a notion that we would be shutting down a plant or laying off workers because labor and management can’t come to a sensible agreement.” But Obama has said the outcome is up to the courts — where most experts expect some sort of settlement.

“We don’t need a president who apologizes for America. We need a president who protects and projects those values.”

Four Pinocchio alert! A variation of this line appears in almost every speech by a GOP candidate for president, but it is completely bogus.

We examined this claim in great detail some months ago, and there is no evidence Obama ever apologized for America. (Some might argue — though we don’t agree — that some of his early speeches had an apologetic tone, but that’s an entirely different matter.) Go back and look at our original column, which includes a number of examples of George W. Bush saying much more apologetic-sounding phrases than Obama.

The Pinocchio Test

On a blended basis, we would rate this as a Two Pinocchio speech, similar to many of the other announcement speeches — a mishmash of high-flying rhetoric and facts sometimes tethered uncertainly to the truth. We look forward to rating more of the governor’s statements in the future.

Two Pinocchios


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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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